There is an excellent article in The Guardian (2 November) suggesting that we’re not out of the woods yet in terms of global economic stability.
Just as many people appear to be taking a well-earned intake of breath, as the strictures and challenges of the last 8 years appear to be easing, this analysis suggests that some of the measures which were put in place by Western economies to circumvent those challenges (summarised as ‘printing money’) have a bite in them we are about to feel.
In essence, as the amount of debt accumulated in that time is significant, and not being adequately serviced, then there is a point at which payback is necessary. If the debt is to be serviced, then there needs to be a period of outstanding productivity which is not evident by most measures.
So, what can this mean for Procurement folk? There’s a number of things we can be thinking about, which may need to be baked into departmental strategies and approaches.
Learning from the last one
Although it was 8 years ago, that’s a whole generation of new purchasing folk who have arrived and learned what to do in the intervening period. This suggests that there will be a variety of views about the sequences of events experienced, and the sorts of issues being faced. As such, we should take stock of the sorts of actions and activities which we had to put in place to safeguard supply chains last time round, so we’re more ready to act this time. A Heads of Procurement recession review session would be a good place to do it; gather people round, have an open session which seeks to capture good practice, and make it available to folks. Fun to do, a great team building session and some genuine sharing available.
Looking at current factors
In the last eight years, a whole range of factors have changed in the overall macro-economic world. This is a good moment to drag out our old favourite, PESTLE analysis, and see what that can tell us. We have new economic situations, new politics, increased nationalism, a spread in Middle East instability, crop and water failure and changes in patterns, and a host of new technology strewn in the path of even the best category strategy. We need to make sure our current approaches are robust in the face of all these changes.
People and Skills
Once we’ve worked out an overall analysis of risk, we can then ask if we’ve got the right balance of skills to manage the risk profile we’re now looking at. For challenging categories, we’re going to need fleet of foot category managers, able to map a path through challenging territory. There’s an opportunity within some of this to make sure that there is appropriate resource available for the most challenging areas. This may be an opportunity to pair an experienced category manager up with someone still exploring the depth and versatility of the approach, and also providing additional resource to accelerate the activity.
Given the potential for challenge, there is even greater opportunity to look at the depth of market research available and to consider how key factors and measures need to be tracked within this economic environment. With our new found analysis of what went badly before, we may be able to devise a better balanced scorecard to deal with the risks we are facing and then look at how we can use available measures ( purchased or free) to help our indicators of progress.
Managing the project
This is now a sufficiently large piece of work to run through to require its own project management and governance to make sure a conclusion is reached. Again, we need to make sure we have the right project manager in place, with an appropriate team appointed, stakeholders managed and communicated with and a good series of outcomes and reviews available.
If we can draw this approach together, we will be better prepared than the last
time, which can only add benefit to our businesses as a whole.
Do you agree? Let us know in the comments below.
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